Strategic change often requires changing a company's culture, either bringing back the values that originally grew the company or empowering emerging values. Because it is extremely hard to see the values needed for a strategy to succeed, companies tend to endorse bland, industry-wide value statements and bring undifferentiated exercises to install practices that support their values.

Our approach, based on twenty years experience and the philosophical work of Dr. Charles Spinosa and Professor Hubert Dreyfus, emphasizes identifying new values that innovators in your own company are starting to act on. We then identify the core practices that go with these values, and make them recurrent. Culture includes many things, but the two crucial levers for culture change are the values people honor and the practices they share for maintaining those values.

Why are values critical today? No supervisor can monitor knowledge workers at all times. No business design can ensure that knowledge workers face the same critical situations day in and day out. The only thing that coordinates action when opportunities arise are shared values. High performance companies need specific, differentiated values to win.

We work with executive teams to articulate needed cultural changes and then identify and modify the core practices that will result in real change. For a company trapped with a culture of stars—all competing against each other—we shifted the focus of executive meetings from offering "dissertations" to making requests and promises to each other. The result was a team-centered culture where results increased as collaboration increased. For a company seeking to move to a project management culture from an engineering one, we instituted design freezes across engineering disciplines and set the project manager up as a reviewer. The result was a shift in focus from individual components to the success of the overall project.

The table below shows some examples of key practices that were instrumental in producing cultural shifts and an estimate of the value of the shift, based on increased revenue, reduced losses, or increased share price.

Industry

Old Culture

New Culture

Key New Practice

Value Estimate

Merchant Banking

Entrepreneurial

Professional Growth

Monthly review of all of a client's transactions

$10s of Millions

Plant Delivery

Engineering

Project Management

Project Managers comment on designs during design freezes

$100s of Millions

Cellular Communications

Product-focused

Customer-focused

Weekly question: Why should the customer
marry us?

$100s of Millions

Biotech

Star-centered

Team-centered

Replaced delivering dissertations with making commitments

$10s of Millions

Commodity Supplier

Managing Access

Customer-focused

Sales Representatives form small clubs of customers for shared credit

$10s of Millions

“In 2002, we embarked on a new, innovative strategy to reduce the costs of producing hydro plants. The strategy required a major change of our company, in processes, tools, and even culture. Chris Davis and his team led the work for changing processes and culture. Over the next year, Chris and Charles Follett led teams involving experts from all our major global centers to design the most efficient, customer-centric processes in the industry—all based on networks of interconnected commitments. They trained our experts to mobilize these new processes and to introduce a commitment-based style of work. The results of our strategic initiative have been outstanding."——Hubert Lienhard—President—Voith Siemens Hydro—————For Additional Reading–Read more about key concepts of Cultural Alignment:———Spinosa, C., —Flores, F.,—and Dreyfus, H.L.—(1997)Disclosing New Worlds: Entrepreneuship, Democratic Action, and the Cultivation of Solidarity